Crocs $CROX Q3 ’21 Quick Review of the Earnings Release

Crocs just released their Q3 ’21 earnings results. Haven’t had a chance to review their earnings call yet since the transcript isn’t out yet. My first impression: Wow. Pretty solid quarter given all the global supply chain issues.

– Revenue: $625.92 M (+73% YoY)
– Net Income $62.34 M (+77% YoY)
– GAAP EPS of $2.42 and Non-GAAP EPS of $2.47 (TTM EPS of $7.25)
– Non-GAAP operating margins of 32.8% (Wow, this keeps getting better every quarter)
Increased FY ’21 revenue guidance to 62-65% YoY vs. 60-65% YoY
– Guided for FY ’22 to be > 20% in revenue growth (This is very impressive, I had forecasted 18-19% just given the insane growth they had this year)
– FY ’22 Operating margins forecasted to be 28% (insanity, is this a tech company?)

They finished yesterday at a share price of $135.93 before this earnings release which is equivalent to a 23.76 TTM PE ratio (Non-GAAP) and given their increased TTM EPS, they could potentially hit $175 if they keep the same PE multiple later or $200+ if they are able to attain the multiple they got after their Investor’s Day conference. Pre-market action is showing them around a 21 P/E ratio. I would assume this only increases given their strong fundamentals.

I’ll admit, I sold half during the early October sell-off to raise cash to buy more Upstart and Affirm (no regrets), but I might have to re-evaluate on adding to my position (winners keep winning!). This was a pretty solid report and their operating margins are pretty impressive. One thing that I did notice is that their borrowing increased a lot. I don’t love debt, so I will be monitoring that. Nice job $CROX.

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